A Brief Overview of Polkadot (DOT) for Beginners

The cryptocurrency world is ever-expanding as new blockchains are launched now and then, making the options for digital currencies more vast and exciting for investors. The Polkadot coin is one such new invention that has piqued the curiosity of ardent and amateur investors alike.

But what is Polkadot (DOT)? What makes it different from other blockchains? And where can you DOT coins? All the answers are in this brief guide. 

What is Polkadot (DOT) coin – Quick history 

To understand why this crypto is unique from others, first, you should know that typically, each currency has a personal blockchain that operates independently. For instance, Ethereum, Cardano, and Bitcoin have their own blockchains and do not interact with each other.

However, this product is designed to function as a multi-chain technology that can connect to other blockchains without hassles. The following detailed information can help you understand the concept better, determining if it is worth investing in.

The co-founder of popular crypto Ethereum, Gavin Wood, first thought about Polkadot and subsequently brought out its whitepaper back in 2016. He founded Web3 Foundation the following year along with Peter Czaban with the sole purpose of developing this unique idea.

Web3 sold DOT tokens the same year and raised $145 million in Ethereum, but the storage wallet was hacked into, incurring a loss of around ninety million dollars. A private token sale was held two years later to recover the losses.

Consequently, Polkadot was introduced into the market in various phases, completing its launch in 2021 with five of its parachains going live.

Critical Components of Polkadot

Polkadot already reached a market value of around fifty billion dollars last year, with experts suggesting that these numbers might rise even further shortly. It was primarily invented for better scalability, interoperability, and upscaled governance, all of which are areas most existing blockchains struggle with.

In essence, it has two critical aspects: relay chains and parachains

Relay chains are where all crypto transactions occur, with the chief function of ensuring overall system management. In contrast, each parachain is a single, individual blockchain, and they can all effectively communicate with one another.

Other vital components include parathreads and bridges, with the former functioning similarly to parachains while the latter enables the network to connect with external networks.

About DOT Token

Besides asking what is Polkadot (DOT), many amateur investors and those with little knowledge of this new crypto chain are curious about DOT. In simple terms, DOT is nothing but the native token in the new blockchain framework Polkadot, exactly like Ether is for Ethereum and BTC for Bitcoin.

The token has several pivotal functions on the network, such as being useful in its governance or connecting a chain to the framework. Also, since it is a transferable token, it can be used and passed around teams that work on the projects associated with the blockchain. Moreover, DOT holders have the authority to create and vote on several proposals within the framework.

Where to buy Polkadot coins?

The quickest and safest way to get hold of this technology is on a secure cryptocurrency exchange platform. So, find a trustworthy and reputable platform that enables users to buy a broad range of crypto and not just this variant while also allowing them to sell their stocks reasonably.

Moreover, the costs of digital coinage on these exchanges are highly affordable, helping investors save money while expanding their crypto investments to a large extent. Therefore, buy this new technology from one of these platforms and store them safely in your crypto wallet.

One of the best crypto exchanges that offers users to buy and trade Polkadot coins is Binance. In this exchange, the fee is as low as 0.1$ compared to Kraken’s fee of 0.26% and Coinbase’s fee of 1.99%. Further, Binance enables users to buy DOT coins with a credit and debit card (meaning fiat currencies) or with any other digital asset available on its network. Finally, Binance also gives users the ability to store the coins on it’s web-wallet known as Binance Trust Wallet.